UA President talks about university system's budget at meeting

$267.6M difference between regents' and governor's budgets

First-time House Finance Committee member Rep. Cathy Muñoz, R-Juneau, led her first subcommittee meeting Tuesday afternoon, as the Finance subcommittee on the University of Alaska budget schedule met in the Alaska State Capitol.

UA President Patrick Gamble and Legislative Finance Division analyst David Teal gave presentations on the university system’s budget overview for fiscal year 2014, with Gamble making UA’s case for budget requests that were not included in Gov. Sean Parnell’s proposed operating and capital budgets last month.

One item that is not on the budget is funding for the director of one of the University of Alaska Southeast’s most heralded career education programs, the Center for Mine Training. Gamble said that funding was cut as the university sought to pare down its operating requests.

“We were hopeful that by bringing in a flat budget … we thought — last year, we used this approach, and it was very successful — it was taken out last year too, but almost every dollar was put back in by the committees, because we were so focused, we were so specific and we were showing what had happened to the money the year before, just like we’re doing,” Gamble said.

Muñoz commented on the absence of the Center for Mine Training director funding request, asking, “Is that program in jeopardy by not having the funding for that position?”

“No, the program won’t fail,” Gamble replied. He added, “The program will continue, but it’s not going to be the program we could make it if we have the right leadership.”

Parnell’s proposed operating budget continues the pattern of fairly modest annual increases for the university, albeit the smallest such increase since 2010. In his budget proposal, $710.2 million in general funds is marked for UA ­— a 2.7 percent increase from the FY13 adopted budget.

The average year-to-year growth rate for the university’s general fund budget since FY05 is 4.8 percent, Teal said.

“That’s a lot of money,” said Teal. “It’s $25 million a year.”

But Teal also noted that even as the university budget has increased, it has decreased as a proportion of the overall operating budget. According to Teal’s chart, it accounts for slightly more than 13.8 percent of total agency operations in Parnell’s FY14 budget proposal — down from 16.4 percent in FY05.

Including federal receipts and other state funds, the university would get $947.6 million for FY14 in Parnell’s proposed operating budget. That tracks fairly closely to the $963.5 million total requested in the UA Board of Regents’ operating budget, a fact noted by Rep. Lora Reinbold, R-Eagle River.

“As you know, we’re all really concerned about the budget,” Reinbold told Gamble. “I want to say I appreciate you holding a flat operating budget.”

The difference between the regents’ capital budget requests and the governor’s proposed capital budget is far more stark, at $306.4 million total requested compared to $38.8 million total proposed.

A large chunk of that difference is funding to complete engineering buildings at the University of Alaska Anchorage and the University of Alaska Fairbanks. The regents requested $118.9 million total for the project, but Parnell’s budget contains no funding for it.

Much of the remainder is deferred maintenance. Gamble warned that unless the large amount of deferred maintenance the university needs to have done is addressed, projected deferred maintenance costs will quickly rise over $1 billion and out of control.

“We’ve got to get control of deferred maintenance,” said Gamble.

Rep. Shelley Hughes, R-Palmer, asked Gamble how the university system is prioritizing deferred maintenance projects.

“You’re not going to have enough money to fix everything that needs to be fixed, so I just want to make sure that we don’t cause further harm to things such as expensive equipment,” Hughes said.

Gamble said the university is trying to do deferred maintenance projects on its list as soon as it receives funding for them.

Said Gamble, “We’re putting the money to work as fast as we can get it to fix those things.”